Local Decentralization and Economic Growth: Evidence from U.S. Metropolitan and Non-Metropolitan Regions

This paper extends the recent empirical literature on the relationship between local decentralization and growth using data from both metropolitan and non-metropolitan regions in the U.S. The analysis utilizes both metropolitan and non-metropolitan regions, and thus avoids the possible selection bias present in previous research. The results for non-metropolitan regions indicate a relatively weak or negative relationship between the local decentralization measures and local economic growth compared to a positive relationship suggested by a recent study on metropolitan regions. Results for the nonmetro regions also suggest that there are different impacts across population and income than we observe for metropolitan regions. JEL Classification: E62, H7, R11